How Colocation, Connectivity and Content can boost your FX trading firm

By Stefano Durdic, Managing Director of Financial Services, Transaction Network Services

The “3Cs” – colocation, connectivity and content – are familiar to any successful financial services firm.

  • Colocation in the right facilities gives foreign exchange trading firms the highly valued resource of low latency access so that they can receive price updates and route orders faster than other investors. In these environments, microseconds make all the difference.
  • Connectivity gives traders fast access to their counterparts, trading hubs, market venues and more, all over the world.
  • Content is key, as traders rely on real-time market data around the globe from exchanges, electronic communications networks and alternative trading systems.

But how do firms manage these crucial elements of their operations most efficiently? All too often, they use a different vendor for each “C”, rather than a single service offering all three. In that scenario, if a problem arises, they’re forced to juggle communications with each individual vendor to find out which C is causing the issue, and then begin troubleshooting.   

However, when a firm engages a single vendor that integrates colocation, connectivity and content, then assessing and solving a problem is simplified. The cost to troubleshoot any problems also drops dramatically by engaging a single vendor with expertise in all 3Cs – because all the pieces are right in one place.

Any network worth its salt will have forward-looking intelligence on which routes are fastest
Any network worth its salt will have forward-looking intelligence on which routes are fastest

Fitting the pieces together

Let’s look a bit closer at how the 3Cs might fit together within a single infrastructure provider:

When it comes to colocation, FX traders must have infrastructure in the right spot, right now, as well as in the future. They need a vendor with that knowledge, and boots on the ground in every key global market to constantly assess circumstances and provide up-to-the-minute intel on the best locations to establish low-latency connections.

Financial service organizations cannot spare expenses for connectivity. They need expert engineers who maintain the network as well as airtight security. In high-frequency trading, nothing is more crucial than low-latency, and any network worth its salt will have forward-looking intelligence on which routes are fastest.

The best infrastructure partner will offer all 3C’s globally
The best infrastructure partner will offer all 3C’s globally

The most useful and valuable content also requires a provider with the expertise and tools to monitor traffic needs. This empowers firms to monitor the amount of traffic required to transport market data, while also projecting future capacity needs. If a network provider doesn’t have this information, then they will not be able to provide the best connectivity.

Each element of the 3Cs is integrated with the other to enable traders to be successful. The best infrastructure partner will offer all three globally, supported by staff in each major financial center who can provide counsel for the fastest, most successful trading, and have the relationships and expertise coupled with a drive to empower their clients to win every trade.

Stefano Durdic

Stefano Durdic joined TNS in January 2019 when the organization acquired his company called R2G. Taking on the role of Senior Vice President for TNS’ Financial Services business, Stefano is responsible for the overall growth and strategic development of TNS’ state-of-the-art solutions. His role includes leading a diverse global team which supports TNS’ customers in over 60 countries. As the founder and managing member of hosting, co-location and market data specialist R2G Services LLC, Stefano created a feature-rich, innovative and highly targeted portfolio of solutions to meet the demanding needs of financial markets traders across the US. After growing R2G into a multi-million dollar business, Stefano recognized the benefits a union with TNS could bring as he sought to expand the company globally.

A seasoned industry professional with more than 25 years’ experience, Stefano has demonstrated the ability to recognize opportunities in the financial markets having previously owned Speed Trading Partners and RedSky Financial, which was acquired by ITG. He also spent seven years in senior roles at Bank of America International.